dbphoenix
Guest Author
- Messages
- 6,954
- Likes
- 1,266
When I asked the question, it was trading between 29.6 and 30.6. Therefore, one could either short a break below 29.6 or a reversal at 29.6. If the reversal were taken, hold it until price reaches 30.6 with a cover stop below your entry.
Db
dbphoenix
Guest Author
- Messages
- 6,954
- Likes
- 1,266
I don't. I trade the NQ. But oil is at least somewhat mean-reverting, and mean-reverting instruments move according to the same principles. You'll notice, for example, that the trading here revolves around the median of the range at 30.10. Not that you have to do anything about it, but at least you'll know why when price stalls at that level.
Db
ThanksWhat do you trade zaysev36
KC-if trading oil in the futures markets you'd be well advised to look into volume profile. Lots of stuff on youtube.
Be advised that oil is a relatively thin and volatile market, am sure there are easier things to trade out there but then again you probably know that already. Happy trading
Thanks
I'm not trading yet. Guess I'm kind of theoretical guy
Trying to get enough (which is as much as I can) knowledge before beginning.
I'm not trading yet. Guess I'm kind of theoretical guy
zaysev, I would seriously think of trading futures as it provides volume as they operate on centralised exchanges. As such, you have a wealth of tools to help you analyse trading based on volume profile and the clues that it provides. Spot fx does not offer this.
I should add that trading forex futures is not advisable as the spot fx market is in control of the related futures markets-I would look at the bund and eurostoxx to start with. Look up volume profile on youtube. Find out that most market pros who trade directionals use the futures markets. Find out that they all use market and volume profile to help their trading analysis.
If you are interested in doing some reading then I can suggest Mind over Markets to start with. I wish I had been given this advice when I first started trading spot fx.
Last edited:
Got it. I will surely try to follow your advice, and perhaps then will ask for more! I'm curious though, why is it so that spot fx market depends on futures markets? What's so special about them?
dbphoenix
Guest Author
- Messages
- 6,954
- Likes
- 1,266
It is something of an exaggeration to claim that all market pros use market profile in their analyses. It would be more accurate to say that they focus on the imbalances between demand and supply using volume to detect the tipping points. Many market pros don't even use charts, much less complicated software.
This is not to say that Steidlmayer had nothing to offer. The first thirty pages of Markets and Market Logic are excellent, focusing as they do on demand and supply and the auction market, even though all of this was addressed decades earlier.
Db
Sorry, I wasn't clear on that one, it's the other way round-spot fx drives futures (not to get too complicated but similar in cash SandP markets as well but there are MUCH more people involved in the emini SandP futures market).
Spot fx is the main market where all the volume takes place, the futures markets for EURUSD (and all currencies) is relatively light. They just follow spot fx prices as they cannot go out of sync otherwise there will be arbitrage opportunities. As such they are 'thin' markets (thin=lower volume/contracts traded) and you might not get as much info out of futures volume as futures markets with higher volumes e.g. eurostoxx and the bund. Trust me, these are great markets to learn on in futures. Everyone loves the emini SandP but that whips around a fair bit.
Spot fx is the main market for all currency transactions as well, not just speculative trading. And to explain this: all trade is done in a home currency e.g. you want something in the UK, you convert to £, if you want something in France, it's euros etcetc. For example, a US company buys/acquires a european compnay for 1 billion euros. If it has no euro accounts then it will need to convert $s into 1 billion euros. Currency futures markets will not see this order activity, and as there is no centralised exchange where volume is collated, neither will spot fx markets. But it's v important info!
It is this daily trade, rather than more speculative activity, that drives fx markets, although that is not say that speculation doesn't exist using the same principles as in other markets. But as spot fx does not operate on a fixed exchange, complete volume is not obtainable and that leaves significant blind spots when trading. Hope that makes sense.
Futures trading does have costs e.g. data feeds/charting, but if start with futures and volume profile you'll be doing yourself a big favour.
Mate, you keep replying to my fairly simple posts on various topics with pedantry and nit picking which doesn't really help anyone, let alone someone who is starting out looking for advice as this individual clearly is doing. If you have something helpful to say on these threads rather than getting bogged down in petty nit picking that needlessly bulks out these threads then please go ahead. But this sort of stuff is not helpful to anyone. Do you have specific, actionable, targeted advice to the person who is asking for it?
Please note that I won't be replying to any of your responses as it doesn't get us anywhere.
dbphoenix
Guest Author
- Messages
- 6,954
- Likes
- 1,266
Providing inaccurate information is just a different kind of pedantry. Your points about fx and futures are well-taken. Your advice about Market Profile is not.
Sorry.
Db
Eurgh, I'm breaking my own promise not to reply and i'm getting caught up in the pedantry. As you yourself admit, professionals focus on supply/demand imbalances. Volume profile is the best way to see this (uhoh here we go another chance for you to interject with some waffle THAT DOESN'T HELP A NEW TRADER ASKING FOR ADVICE).
I apologise profusely for saying that all professionals use volume profile (to be pedantic I said VOLUME not MARKET profile-see how annoying it is?), but as you pedantically admit, they use similar deliberations which VOLUME profile provides the same/similar readings (uhoh another chance for a pedantic argument that helps no-one).
Now please, try to say something that is helpful, specific and actionable on this thread to a new trader asking for advice. Try it! Please!!
I really am done now.
In all sincerity, have a nice day and happy trading.
Bootsyjam
